Monday, November 28, 2022

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    With NFTs we need to augment the real world, not attack it

    Following a controversial stunt burning of original Frida Kahlo artwork to launch an NFT, Jellyfish’s James Croft tells The Drum that the future of the technology lies in evolving, not destroying, physical objects.

    With a slump in interest and investment, the future of NFTs is in some doubt. According to a recent survey by Variety and GetWizer, opinion of NFTs being a bad investment increased from 28% in January to 44% in July of this year. 

    This shift in attitude seemingly reflects where the NFT space is on the Gartner Hype Cycle: in the ‘trough of disillusionment.’ How we transition from this trough will be the key to cracking (or not!) the future of NFTs. 

    But can the future of NFTs lie in smart applications bridging the digital and physical worlds to create new experiences?

    Destruction fuels disillusionment

    It’s alarming that a millionaire thinks it a good idea to burn an original Frida Kahlo drawing to launch their NFT collection into the metaverse. Acts like this rob the world of priceless artwork and stoke disbelief in the NFT space.

    On Twitter, many were made angry by the burning.

    <blockquote class=”twitter-tweet”><p lang=”en” dir=”ltr”>So some rich bitch burned a piece of Frida Kahlo artwork just to make 10,000 NFT’s of it? What in the dystopian hell scape</p>&mdash; ? ? (@aalexandriabish) <a href=””>October 8, 2022</a></blockquote> <script async src=”” charset=”utf-8″></script>

    The destruction (rather than the evolution) of physical things won’t be part of building the NFT future.

    The best of both worlds

    Opinion is divided on the relative value of digital and real-world assets. Damien Hirst’s The Currency project gave 10,000 future owners a choice: either own a physical artwork or NFT. All those who chose an NFT would see the physical piece burned. Who chose what? 5.5k for the real thing v 4.5k opting for the NFT.

    To regain confidence in NFTs, we need more philosophical debate and better understanding of the relationship between the digital and physical worlds. The smart collaboration between, and evolution of, the two is where NFT opportunities lie.

    NFTs may indeed replace some physical things, like gym membership cards and car owners’ handbooks. There, new technology can better replace an outdated counterpart.

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    Other opportunities will see both worlds have a role to play, and by harnessing the best of both the outcome can be new experiences and products that genuinely feel worth being part of.

    Ideally, this gets us to a more enlightened place where there isn’t a need to destroy, say, priceless art. 

    One way to have approached the Frida Kahlo project, for instance, would have been to take inspiration from decentralized autonomous organizations (DAOs), where NFTs enable part ownership of the artwork. Most people can’t afford to own the whole piece outright, but by bridging the best of both worlds, the existence of a rare piece of art heritage and shared ownership enabled by an NFT could have created real added value in the world.

    According to a Scalefast survey, 25% of customers interested in purchasing an NFT would be more likely to do so if it came with a physical good. This is where I see real opportunities for brands to create value between these two spaces.

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    World-bridging opportunities for brands

    As I’ve argued previously, your first NFT question should always be ‘what is the value-add, new experience or utility that NFTs can create?’ With this NFT 2.0 mindset, there are some great examples of brands bridging the digital-physical worlds to build new experiences.

    Take Live Nation’s Live Stubs: collectible NFTs that fans receive when purchasing physical concert tickets. The NFT gives fans a digital stub to hold onto; it also gives Live Nation a new way to engage with music fans, with exclusive content and experiences.

    Or Nike’s RTFKT Dunk Genesis Cryptokicks. Each of the 20,000 NFT trainers can be visualized in the real world through a Snapchat filter, allowing owners to show off and experience their NFT in a tangible way, elevating it from ‘mere’ digital asset. The vision doesn’t stop there; Nike’s original patent showcases its ambition that owners will be able to “intermingle or breed the digital shoe with another digital shoe to create ‘shoe offspring’ and have the offspring made as a new, tangible pair of shoes.”

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    Digital design inspires the real world

    While the focus in digital and virtual spaces is often the challenge of making experiences and design more realistic, the flow of ideas and inspiration can go both ways.

    A novel moment at Paris Fashion Week was a collection from Loewe that featured ‘pixelated’ clothing, bringing virtual fashion into the real world. As our digital and physical lives become increasingly intertwined, expect to see this more.

    As more and more brands embark on multidimensional campaigns, the starting point for thinking and creativity doesn’t have to be limited to a linear process. An idea can form in a digital space and feed into a physical realization (as with Loewe), and vice-versa, inspiring new ideas and creativity for experiences.

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    Approaching the application of NFTs with a bridge-building mindset is one way to create fruitful and value-generating experiences, leveraging the best of both digital and physical worlds. The future lies in experiences that are complementary and collaborative, not destroying physical things.

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